America's middle class no longer world's richest

Monday

Apr 28, 2014 at 12:01 AMApr 28, 2014 at 5:16 PM

Middle-class Canadians out-earn Americans, and the poor in Europe make more money than their U.S. counterparts.

Lane Anderson

The American middle class has been the wealthiest in the world for a long time, but no longer.
Middle-class Canadians, who earned much less than American counterparts in 2000, now appear to be making more than Americans, according to the New York Times. At the same time, poor people in Europe are making more than poor Americans.
The figures come from surveys conducted over the past 35 years by LIS, a group that maintains the Luxembourg Income Study Database and collects household income data from around the world. The results show that although growth in America has kept pace with other countries, very few Americans benefit from that growth.
The top 1 percent of households took home 22.5 percent of America's income in 2012, which is the most since 1928. Economist Thomas Piketty, author of the bestseller "Capital in the 21st Century," suggests that this income gap not seen since the Gilded Age might be a warning that the "rich will get richer, and everyone else will find it nearly impossible to catch up."
He argues that overpaying corporate executives is squeezing the middle class, and that more education and higher taxes on wealth would help.
"There are two big forces that are squeezing the middle class," Piketty said in an interview with the Associated Press. "One is the rise of the very top executive compensation, which implies that the share of labor income going to the middle and lower class is shrinking. That has been quite spectacular in the U.S. The other force we see is that the share of a country's income going to labor tends to decline when the share that goes to capital is rising."
Meanwhile, America's poor may struggle even more than the middle class, according to the New York Times report. U.S. families in the 20th percentile of the income distribution make less than their counterparts in Canada, Sweden, Norway, Finland, and the Netherlands, which was not true 30 years ago.%3Cimg%20src%3D%22http%3A//beacon.deseretconnect.com/beacon.gif%3Fcid%3D165753%26pid%3D46%22%20/%3E